-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M5b5hdFZJ0K+OeTOsDpxHz7OQtANeVCal3J9n/sN5O6bZSdT6xBP5dLcRFR0zHb+ 2Xh9FLKUFf52AcTFKanfPA== 0000718446-00-000002.txt : 20000324 0000718446-00-000002.hdr.sgml : 20000324 ACCESSION NUMBER: 0000718446-00-000002 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON BANCORP CENTRAL INDEX KEY: 0000718446 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 953770539 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-12510 FILM NUMBER: 575983 BUSINESS ADDRESS: STREET 1: 11150 W OLYMPIC BL CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3109969100 MAIL ADDRESS: STREET 1: 11150 W OLYMPIC BLVD CITY: LOS ANGELES STATE: CA ZIP: 90064 DEF 14A 1 MARATHON BANCORP 11150 W. OLYMPIC BOULEVARD LOS ANGELES, CALIFORNIA 90064 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS APRIL 17, 2000 TO OUR SHAREHOLDERS: The 2000 Annual Meeting of Shareholders of Marathon Bancorp will be held at the Bancorp's main office located at 11150 W. Olympic Boulevard, Los Angeles, California, on Monday, April 17, 2000 at 4:00 p.m. local time. At the meeting, we will ask you to act on the following matters: 1. ELECTION OF DIRECTORS To elect seven (7) persons to the board of ----------------------- directors to serve until the next annual meeting. The following persons are nominees: Robert J. Abernethy Robert Oltman Craig D. Collette Ann Pappas Frank Jobe, M.D. Nick Patsaouras C. Thomas Mallos 2. OTHER BUSINESS To transact such other business as may properly come --------------- before the meeting or any adjournment thereof. If you were a shareholder of record at the close of business on March 6, 2000 you may vote at the meeting or at any postponement or adjournment of the meeting. BY ORDER OF THE BOARD OF DIRECTORS /s/ Robert L. Oltman March 06, 2000 Robert L. Oltman, Secretary PROXY STATEMENT FOR MARATHON BANCORP This Proxy Statement contains information on the 2000 Annual Meeting of Shareholders of Marathon Bancorp to be held at its offices located at 11150 W. Olympic Boulevard, Los Angeles, California, on Monday, April 17, 2000 at 4:00 p.m., and at any and all adjournments of the meeting. INFORMATION ABOUT THE ANNUAL MEETING AND VOTING WHY DID YOU SEND ME THIS PROXY STATEMENT? We sent you this Proxy Statement and the enclosed proxy card because the Board of Directors is soliciting your vote at the 2000 Annual Meeting of the Shareholders. This Proxy Statement summarizes the information you need to know to cast an informed vote at the meeting. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card. We will begin sending this Proxy Statement, Notice of Annual Meeting and the enclosed proxy card on or about March 23, 2000 to all shareholders entitled to vote. The record date for those entitled to vote is March 6, 2000. On March 6, 2000 there were 3,837,019 shares of our common stock outstanding. The common stock is our only class of stock outstanding. We are also sending our Annual Report for the year ended December 31, 1999 along with this Proxy Statement. The Annual Report is not to be deemed a part of the material for the solicitation of proxies. HOW DO I VOTE BY PROXY? Whether your plan to attend the meeting or not, we urge you to complete, sign and date the enclosed proxy card and to return it promptly in the envelope provided. Returning the proxy card will not affect your right to attend the meeting and vote. If you properly fill in your proxy card and send it to us in time to vote, your "proxy" (one of the individuals named on your proxy card) will vote your shares as you have directed. If you sign the proxy card but do not make specific choices, your proxy will vote your shares as recommended by the Board of Directors as follows: "FOR" THE ELECTION OF ALL SEVEN NOMINEES FOR DIRECTOR If any other matter is presented, your proxy will vote in accordance with the recommendation of the Board of Directors, or, if no recommendation is given, in their own discretion. At the time this Proxy Statement went to press, we knew of no matters that needed to be acted on at the meeting, other than those discussed in this Proxy Statement. HOW MANY VOTES DO I HAVE? Each share of common stock entitles you to one vote. The proxy card indicates the number of shares of common stock that you own. However, in the election of directors, you are entitled to cumulate your votes if you are present at the meeting, the nominee's(s') name(s) have properly been placed in nomination, and you have given notice at the meeting prior to the actual voting of your intention to vote your shares cumulatively. Cumulative voting allows you to give one nominee as many votes as is equal to the number of directors to be elected, multiplied by the number of shares you own, or to distribute your votes in the same fashion between two or more nominees. The return of an executed proxy grants the Board of Directors the discretionary authority to also cumulate votes. CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD? Yes. Even after you have submitted your proxy, you may change your vote at any time before the proxy is exercised if you file with the Secretary of the Company either a notice of revocation or a duly executed proxy bearing a later date. The powers of the proxy holders will be suspended if you attend the meeting in person and so request, although attendance at the meeting will not by itself revoke a previously granted proxy. HOW DO I VOTE IN PERSON? If you plan to attend the meeting and vote in person, we will provide a ballot form when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, you must bring a proxy card and letter from the nominee authorizing you to vote the shares and indicating that you are the beneficial owner of the shares on March 6, 2000, the record date for voting. WHAT CONSTITUTES A QUORUM? The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum, permitting the conduct of business at the meeting. Proxies which are marked as abstentions will be included in the calculation of the number of shares considered to be present at the meeting. WHAT VOTE IS REQUIRED FOR EACH PROPOSAL? The seven nominees for director who receive the most votes will be elected. So, if you do not vote for a particular nominee or you indicate "withhold authority to vote" for a particular nominee on your proxy card, your vote will not count either "for" or "against" the nominee. WHAT ARE THE COSTS OF SOLICITATION OF PROXIES? We will bear the costs of this solicitation, including the expense of preparing, assembling, printing and mailing this Proxy Statement and the material used in this solicitation of proxies. The proxies will be solicited principally through the mails, but directors, officers and regular employees of the Company may solicit proxies personally or by telephone. Although there is no formal agreement to do so, we may reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expense in forwarding these proxy materials to their principals. In addition, we may pay for and utilize the services of individuals or companies that are not regularly employed in connection with the solicitation of proxies. STOCK OWNERSHIP WHO ARE THE LARGEST OWNERS OF THE COMPANY'S STOCK? The following table shows the beneficial ownership of common stock as of March 6, 2000 by each person we know to be the beneficial owner of more than five percent of the outstanding shares of common stock. "Beneficial ownership" is a technical term broadly defined by the Securities and Exchange Commission to mean more than ownership in the usual sense. So, for example, you beneficially own the Company's common stock not only if you hold it directly, but also if you indirectly, through a relationship, contract or understanding, have, or share, the power to vote the stock, to sell it or you have the right to acquire it within 60 days of March 6, 2000:
Number of Percent of Name Shares Class - ------------------------------------- --------- ----- Oppenheimer-Spence Financial Services 224,897(1) 5.9 Partnership LP. Robert L. Oltman 200,857(2) 5.1
(1) Based on a Schedule 13D/A filed with the Securities and Exchange Commission on September 12, 1997. The address of this beneficial owner is 119 West 57th Street, New York, NY 10019. (2) Includes 9,935 shares acquirable by the exercise of stock options. HOW MUCH STOCK DO OUR DIRECTORS AND OFFICERS OWN?
Common Stock Beneficially Owned as of March 6, 2000 -------------------------------- Number of Percent of Name of Beneficial Owner Shares Class - ----------------------------------- ------ --------- Directors and Named Executive Officers: - -------------------------------------------------- Nikolas Patsaouras 50,693(1) 1.3 Robert J. Abernethy 115,234(2) 2.9 Craig D. Collette 73,723(3) 1.9 Frank W. Jobe, M.D. 80,188(4) 2.0 C. Thomas Mallos 57,813(5) 1.5 Robert L. Oltman 200,857(6) 5.1 Ann Pappas 69,946(7) 1.8 Timothy J. Herles 19,533(8) 0.5 Howard J. Stanke 18,500(9) 0.5 Adrienne Caldwell 11,789(10) 0.3 Total for all directors, named executive officers and all executive officers (numbering 10) 698,276(11) 17.8
(1) Mr. Patsaouras has shared voting and investment powers as to 37,500 of these shares. The amount includes 12,783 shares acquirable by exercise of stock options. (2) The amount includes 7,935 shares acquirable by exercise of stock options. (3) Mr. Collette has shared voting and investment powers as to 72,723 shares. The amount includes 1,000 shares acquirable by exercise of stock options. (4) The amount includes 5,998 shares acquirable by exercise of stock options. (5) Mr. Mallos has shared voting and investment powers as to 45,108 of these shares. The amount includes 9,935 shares acquirable by exercise of stock options. (6) Mr. Oltman has shared voting and investment powers as to 179,424 of these shares. The amount includes 9,935 shares acquirable by exercise of stock options. His address is c/o Marathon Bancorp, 11150 West Olympic Boulevard, Los Angeles, California 90064. (7) Ms. Pappas has shared voting and investment powers as to 59,896 of these shares. The amount includes 9,935 shares acquirable by exercise of stock options. (8) Mr. Herles has shared voting and investment powers as to 1,184 of these shares. The amount includes 18,349 shares acquirable by exercise of stock options. (9) Mr. Stanke has shared voting and investment powers as to 18,500 shares. (10) These shares are acquirable by exercise of stock options. (11) This amount includes 93,659 shares acquirable by exercise of stock options within 60 days of March 06, 2000. DID DIRECTORS AND OFFICERS COMPLY WITH THEIR SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE REQUIREMENTS IN 1999? Section 16(a) of the Securities and Exchange Act of 1934 requires our executive officers and directors, and persons who own more than ten percent of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission ("SEC"). The SEC requires executive officers directors and greater than ten-percent shareholders to furnish to us copies of all Section 16(a) forms they file. Based solely on our review of these reports and of certifications furnished to us, we believe that during the fiscal year ended December 31, 1999 all executive officers, directors and greater than ten-percent beneficial owners complied with all applicable Section 16 (a) filing requirements. DISCUSSION OF PROPOSALS RECOMMENDED BY THE BOARD OF DIRECTORS PROPOSAL 1: ELECTION OF DIRECTORS WHAT DO THE BYLAWS SAY ABOUT THE ELECTION OF DIRECTORS? The Company's Bylaws presently provide that the number of directors of the Company shall not be less than seven (7) nor more than twelve (12) until changed by an amendment to the Bylaws adopted by the Company's shareholders. The Bylaws further provide that the exact number of directors shall be seven (7) until changed by a Bylaw or Bylaw amendment duly adopted by the Company's shareholders or board of directors. We have nominated seven directors for election at the annual meeting, which is the number of slots fixed for the election of directors. We will nominate the persons named below, all of whom are present members of the Board of Directors of the Company, for election to serve until the 2000 Annual Meeting of Shareholders. Each of these persons is also a member of the Board of Directors of our subsidiary Marathon National Bank. The Board will cast its votes to effect the election of these nominees. If any nominee is unable to serve, your proxy may vote for another nominee proposed by the Board. Nominations may be made by shareholders at the meeting. The following table sets forth as of March 6, 2000, the names of, and certain information concerning, the persons nominated by the board of directors for election as directors of the Company.
THE NOMINEES Year First Name and Title Appointed Principal Occupation Other than Director Age Director During Past Five Years - ------------------------ --- ---------- ------------------------- Nikolas Patsaouras Chairman 56 1982 President of Patsaouras & Associates (consulting engineers). Robert J. Abernethy 60 1983 President, American Standard Development Co. Craig D. Collette President & CEO 57 1997 President and Chief Executive Officer of the Company and the Bank. Former President and Chief Operating Officer of TransWorld Bank from June 1996 to January 1997, and former President and Chief Executive Officer of Landmark Bank from January 1979 to April 1996. Frank W. Jobe, M.D. 74 1985 Orthopedic Surgeon C. Thomas Mallos 63 1982 President, C. Thomas Mallos, Accountancy Corp. Robert L. Oltman 62 1982 President, Oltman Management Company. Ann Pappas 71 1982 Restaurateur.
All of the nominees have served as members of the Company's board of directors during the past year. Mr. Abernethy is a director of Public Storage Inc. which also is a public company registered with the Securities and Exchange Commission. THE BOARD OF DIRECTORS AND COMMITTEES The Company's board of directors held twelve (12) meetings during 1999. None of the directors attended less than 75 percent of all board of directors meetings and committee meetings (of which they were a member) that were held in 1999, except for Dr. Jobe who attended one meeting. There were no standing committees of the Company's board of directors. In 1999, the Bank had a standing Audit Committee, Executive and Compensation Committee and Loan Committee THE AUDIT COMMITTEE The Bank's Audit Committee, which consisted of Thomas Mallos (chairman) and Messrs. Patsaouras, Oltman and Ms. Pappas, met four times during 1999. The purpose of the Audit Committee is to direct the activities of the external auditors of the Bank to fulfill the legal and technical requirements necessary to adequately protect the shareholders, directors and employees. The Audit Committee also recommends to the Board of Directors the appointment of independent accountants and reviews the findings and recommendations from all the external auditors. THE EXECUTIVE AND COMPENSATION COMMITTEE The Bank's Executive and Compensation Committee, which consisted of Mr. Patsaouras (chairman) and Messrs. Abernethy, Mallos, Oltman and Ms. Pappas, met once in 1999. The Executive and Compensation Committee reviews and approves compensation arrangements of the Bank's senior officers and reviews staff compensation and benefits. THE LOAN COMMITTEE The Bank's Loan Committee, which consists of Messrs. Collette (Chairman), Patsaouras, Herles, Mallos, Oltman and Ms. Pappas meet weekly to review and approve loan requests. EXECUTIVE OFFICERS The following table provides certain information as of March 06, 2000 (except as otherwise disclosed) regarding the executive officers of the Company and the Bank, other than Mr. Collette, whose information is provided in the table above.
Principal Occupation Name Age During Past Five Years - --------------------- ---- ---------------------------------------------------------------------- Timothy J. Herles 58 Executive Vice President/Senior Credit Officer of the Bank since 1982. Adrienne Caldwell 57 Executive Vice President/Chief Operations Administrator of the Bank since 1990. Howard J. Stanke 51 Executive Vice President/Chief Financial Officer of the Company and Bank effective June 9, 1997. Mr. Stanke was previously Executive Vice President/Chief Financial Officer of TransWorld Bancorp and TransWorld Bank since 1980 and was with TransWorld Bancorp and Bank from 1978 to May 1997.
EXECUTIVE COMPENSATION HOW DO WE COMPENSATE EXECUTIVE OFFICERS? The following table sets forth certain summary compensation information for the Company's and the Bank's Chief Executive Officer and each executive officer whose total annual salary and bonus exceeded $100,000 (the "Named Executives") for the fiscal year ended December 31,1999.
SUMMARY COMPENSATION TABLE ---------------------------- Long Term Compensation ------------------------------ Annual Compensation Awards Payouts - --------------------------------- -------------------- -------- (a) (b) (c) (d) (e) (f) (g) (h) (i) - --------------------------------- ----- --------- ------- --------- --------- --------- -------- ----------- Other Annual Restricted All Other Name and Compen- Stock Options/ LTIP Compen- Principal Salary Bonus sation Award(s) SARs Payouts sation Position Year ($) ($) ($)(1) ($) (#) ($) ($) - --------------------------------- ----- --------- ------- --------- ---------- --------- -------- ----------- Craig D. Collette(3) President and Chief Executive Officer of the Company and the Bank 1999 $ 173,102 $ 0 $ 8,400 0 11,000 0 $ 72,069(2) 1998 $ 171,602 $ 0 $ 8,400 0 5,000 0 $ 5,199 1997 $ 160,714 $ 0 $ 7,700 0 30,000 0 $ 1,238 ----- --------- ------- --------- ---------- --------- -------- ----------- Timothy J. Herles Executive Vice President and Chief Credit Officer of the Bank 1999 $ 104,304 $ 4,000 $ 8,400 0 8,000 0 $ 4,539 1998 $ 101,089 $ 0 $ 8,400 0 34,184 0 $ 4,177 1997 $ 96,372 $ 0 $ 8,400 0 15,000 0 $ 2,525 ----- --------- ------- --------- ----------- --------- -------- ----------- Howard J. Stanke Executive Vice President and Chief Financial Officer of the Company and Bank(4) 1999 $ 94,682 $ 4,000 $ 7,200 0 8,000 0 $ 3,168 1998 $ 88,409 $ 0 $ 7,200 0 0 0 $ 2,852 1997 $ 49,803 $ 0 $ 4,200 0 15,000 0 $ 304 ----- --------- ------- --------- ----------- --------- -------- -----------
(1) These amounts represent the automobile allowance. (2) This amount includes $66,870 of vested benefits in Mr. Collette's salary continuation plan. (3) Mr. Collette commenced employment on January 22, 1997. (4) Mr. Stanke commenced employment on June 1, 1997 The following table presents information with respect to stock options to purchase shares of the Company's common stock granted during the fiscal year ended December 31, 1999 to any of the Company's Named Executives.
OPTION/SAR GRANTS TABLE ------------------------- OPTION/SAR GRANTS IN LAST FISCAL YEAR Individual Grants - -------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) - -------------------------------------------------------------------------------------------- % of Total Number of Securities Options/SARs Underlying Granted to Exercise or Options/SARs Employees in Base Price Expiration Name Granted (#)(1) Fiscal Year ($/Share) Date - --------------------------------------------------------------------------------------------- 6,000 7.2% $2.90 12/27/2009 Craig D. Collette 5,000 6.0% $2.61 01/19/2009 - --------------------------------------------------------------------------------------------- 3,000 3.6% $2.90 12/27/2009 Timothy Herles 5,000 6.0% $2.96 07/19/2009 - --------------------------------------------------------------------------------------------- 3,000 3.6% $2.90 12/27/2009 Howard J. Stanke 5,000 6.0% $2.96 07/19/2009 - --------------------------------------------------------------------------------------------- (1) The stock options are incentive stock options as provided in Section 422 of the Internal Revenue Code. The vesting of the stock options is in equal installments of 20% per year from the date of the option grant.
The following table provides information with respect to the Named Executives concerning the exercise of options during the fiscal year ended December 31, 1999, and unexercised options held by the Named Executives as of December 31, 1999.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE -------------------------------------------------- AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUE (a) (b) (c) (d) (e) - ------------------ ------------------- ---------------- ------------------ ---------------------- Number of Value of Unexercised Unexercised In-the-Money Options/SARs at Options/SARs at Year-End (#) Year-End ($) Shares Acquired on Value Realized Exercisable/ Exercisable/ Name Exercise (#) ($) Unexercisable Unexercisable - ------------------ ------------------- ---------------- ------------------ ---------------------- Craig D. Collette 6,000 $ 372 1,000 / 34,000(1) $ 0 / 7,473(1) - ------------------ ------------------- ---------------- ------------------ ---------------------- Timothy J. Herles 0 N/A 18,349 / 44,347(1) $ 0 / 111(1) - ------------------ ------------------- ---------------- ------------------ ---------------------- Howard J. Stanke 3,000 $ 1,125 0 / 23,000(1) $ 0 / 4,044(1) - ------------------ ------------------- ---------------- ------------------ ---------------------- N/A - means not applicable. (1) Options only. (2) Value of unexercised options is the difference between the fair market value of the common stock underlying the options and the exercise price of the grant at fiscal year-end, respectively.
EMPLOYMENT AGREEMENTS The Company and the Bank have employment agreements with Mr. Craig D. Collette and Mr. Howard J. Stanke. Mr. Collette's employment agreement provides that he shall is to serve for a term of five years commencing January 15, 1997 as the President and Chief Executive Officer of the Company and the Bank. The base annual salary for Mr. Collette is $170,000 per year, with increases to be determined at the discretion of the Boards of Directors of the Bank and the Company. The agreement provides Mr. Collette with four weeks vacation, health, disability and life insurance benefits, $700 per month for car allowance, stock options to acquire 30,000 shares of Common Stock with vesting at 20% per year (which were granted in 1997), salary continuation benefits as described below, and indemnification for certain matters incurred in connection with his actions which arose out of and was within the scope of his employment. If the Company and the Bank terminate Mr. Collette without cause, Mr. Collette shall be entitled to (i) two years then base salary in a lump sum at the time of termination, and (ii) continuation of insurance benefits for 24 months. Upon any merger or consolidation where the Company and the Bank are not the surviving or resulting corporations, or upon any transfer of all or substantially all of the assets of the Company and the Bank, and Mr. Collette is not retained for the remaining term of the agreement in a comparable position of the resulting corporation, Mr. Collette shall be paid two years of his then base salary in a lump sum within ten days of such termination. Mr. Stanke's employment agreement provides that Mr. Stanke shall serve for a term of five years commencing June 1, 1997 as the Executive Vice-President and Chief Financial Officer of the Company and the Bank. The base annual salary for Mr. Stanke is $85,000 per year, with increases to be determined at the discretion of the Boards of Directors of the Bank and the Company. The agreement provides Mr. Stanke with four weeks vacation, health, disability and life insurance benefits, $600 per month for car allowance, stock options to acquire 15,000 shares of Common Stock with vesting at 20% per year (which were granted in 1997), and indemnification for certain matters incurred in connection with his actions which arose out of and was within the scope of his employment. If the Company and the Bank terminate Mr. Stanke without cause, Mr. Stanke shall be entitled to (i) one years then base salary in a lump sum at the time of termination, and (ii) continuation of insurance benefits for 24 months. Upon any merger or consolidation where the Company and the Bank are not the surviving or resulting corporations, or upon any transfer of all or substantially all of the assets of the Company and the Bank, and Mr. Stanke not be retained for the remaining term of the agreement in a comparable position of the resulting corporation, Mr. Stanke shall be paid the greater of one year of his then base salary or the negotiated severance payment for change of control in a lump sum within ten days of such termination. SALARY CONTINUATION PLAN FOR EXECUTIVE OFFICERS On January 16, 1998, the Bank and Mr. Collette entered into a salary continuation agreement to provide salary continuation benefits to Mr. Collette. If Mr. Collette continues in the employ of the Bank until age 65 ("Retirement Age"), he will receive from the Bank under the salary continuation agreement $150,000 per year for 10 years beginning at his reaching Retirement Age. In the event Mr. Collette terminates employment due to disability prior to age 65, he will receive the salary continuation benefits in the amount of $150,000 per year for 10 years beginning at his reaching Retirement Age. In the event Mr. Collette dies while actively employed by the Bank prior to reaching Retirement Age, his beneficiary will receive from the Bank benefits in the amount of $150,000 per year for 10 years beginning with the month following his death or the total benefit value in a lump sum 30 days following his death at the choice of the beneficiary. In the event of termination without cause Mr. Collette shall receive a benefit amount of $150,000 to be paid each year for 10 years beginning at Retirement Age. In the event of termination due to early retirement or voluntary termination other than a change of control, Mr. Collette shall receive an annual benefit amount beginning after Retirement Age for 10 years that is based on his years of service with the Bank and subject to a maximum annual benefit amount of $150,000 per year. In the event of a change in control of the Bank while Mr. Collette is in active service with the Bank, he will receive beginning on the first day of the month following the consummation of the change in control $150,000 per year for 10 years. In the event Mr. Collette is terminated for cause he will forfeit any benefits from the salary continuation agreement. On January 1, 2000 the Bank entered into salary continuation agreements with Mrs. Caldwell, Mr. Herles and Mr. Stanke to provide salary continuation benefits to them. If they continue in the employ of the Bank until retirement, they will receive from the Bank under the salary continuation agreement $50,000 for each year they have been vested to be paid out at a rate of 10% per year for 10 years beginning at their reaching retirement age. They will vest 10% each year the Company achieves a 1% return on assets and a 10% return on equity. In the event they terminate employment due to disability prior to retirement age, they will receive the salary continuation benefits in their vested amount of $50,000 per year for 10 years beginning the month after termination of employment. In the event they die while actively employed by the Bank prior to reaching retirement age, their beneficiaries will receive from the Bank benefits in the amount of $50,000 per year for 10 years beginning with the month following their death or the total benefit value in a lump sum 30 days following their death at the choice of the beneficiary. In the event of early termination due to involuntary termination, early retirement or voluntary termination other than a change of control, they shall receive an annual benefit amount beginning after retirement age for 10 years that is based on their vested years of service with the Bank and subject to a maximum annual benefit amount of $50,000 per year. In the event of a change in control of the Bank while they are in active service with the Bank, they will receive beginning on the first day of the month following termination of employment $50,000 per year for 10 years. In the event they are terminated for cause they will forfeit any benefits from the salary continuation agreement. HOW DO WE COMPENSATE DIRECTORS? The Company pays no directors fees. Each director of the Bank, including Mr. Collette, receives $350 per meeting for his or her attendance at all regular or special meetings of the Bank Each non-employee director also receives $25 per committee meeting of the Bank. The maximum a Bank director (other than the Chairman) may receive for attendance at the Bank's board and committee meetings is $500 per month. The Chairman receives additional directors fees of $1,500 per month from the Bank with a maximum of directors fees of $2,000 per month. In addition, the Bank pays for some of the directors' insurance premiums for medical, dental and vision coverage and for all of the directors basic and voluntary life insurance premiums. The total amount the Bank paid on behalf of its directors pursuant to these benefits was $37,175 in 1999. During 1999, non-qualified stock options were granted to directors at a price of $2.90 per share to expire on December 27, 2009. Options were granted for 5,000 shares each to the following directors Nikolas Patsaouras, Robert Abernethy, Frank Jobe, C. Thomas Mallos, Robert Oltman and Ann Pappas . The options were granted pursuant to the Company's 1998 Stock Option Plan and vest in equal installments over a five-year period. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Some of the Company's directors and executive officers and their immediate families as well as the companies with which they are associated are customers of, or have had banking transactions with, the Bank in the ordinary course of the Bank's business, and the Bank expects to have banking transactions with such persons in the future. In management's opinion, all loans and commitments to lend included in such transactions were made in compliance with applicable laws on substantially the same terms, including interest rates and collateral, as those prevailing for comparable transactions with other persons of similar creditworthiness and, in the opinion of management, did not involve more than a normal risk of collectability or present other unfavorable features. WHO ARE THE INDEPENDENT ACCOUNTANTS WE HAVE ENGAGED? The firm of Vavrinek, Trine, Day & Co. LLP served as independent public accountants for the Company and the Bank through the year 1999 and has been selected to be the Company's independent public accountants for the year 2000. All services rendered were approved by the Company's board of directors, which has determined the firm of Vavrinek, Trine, Day & Co. LLP to be independent. It is expected that one or more representatives of Vavrinek, Trine, Day & Co. LLP will be present at the Meeting and will be given the opportunity to make a statement, if desired, and to respond to appropriate questions. SHAREHOLDER PROPOSALS Under certain circumstances, shareholders are entitled to present proposals at shareholder meetings. Any such proposal to be included in the Proxy Statement for the Company's 2001 Annual Meeting of Shareholders must be submitted by a shareholder prior to November 23, 2000 in a form that complies with applicable regulations. In addition, in the event a shareholder proposal is not submitted to the Company prior to February 6, 2001, the proxy to be solicited for by the Board of Directors for the 2001 Annual Meeting of Shareholders will confer authority to the holders of the proxy to vote the shares in accordance with their best judgment and discretion, if the proposal is presented at the 2001 Annual Meeting of Shareholders, without any discussion of the proposal in the proxy statement for such meeting. OTHER MATTERS Management does not know of any matters to be presented at the Meeting other than those set forth above. However, if other matters come before the Meeting, it is the intention of the persons named in the accompanying Proxy as proxyholders to vote the shares represented by the Proxy in accordance with the recommendations of management on such matters, and discretionary authority to do so is included in the Proxy. MARATHON BANCORP /s/ Robert L. Oltman Dated: March 06, 2000 Robert L. Oltman, Secretary The Annual Report to Shareholders for the fiscal year ended December 31, 1999 is being mailed concurrently to the Company's shareholders. The Company's Annual Report contains the consolidated financial statements of the Company and its subsidiary. A COPY OF THE COMPANY'S 1999 ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K WILL BE PROVIDED TO THE COMPANY'S SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY, MARATHON BANCORP, 11150 W. OLYMPIC BOULEVARD, LOS ANGELES, CALIFORNIA 90064. -----END PRIVACY-ENHANCED MESSAGE-----